DURBAN - SUN INTERNATIONAL has seen early signs of a recovery, following a positive last quarter in the year to end December after being knocked by the lockdown and trading curbs due to the Covid-19 outbreak.
The group said yesterday that its South African casino income showed a positive trend in the second half of the year and increased as a percentage of that in 2019 from 52 percent in the third quarter to 71 percent in the last quarter of 2020.
Its casino market share increased to 28.4 percent in Gauteng and 39.6 percent and KwaZulu-Natal since the lifting of the lockdown. Its market share was up by 2.5 percent and 2 percent in the two provinces compared with the end of 2019.
However, the Covid-19 outbreak had a significant impact on the group’s earnings for the year to end December, with all of its operations forced to close for three months or longer, significantly disrupting trading. As a result, income from continuing operations declined 49 percent to R6.1 billion, and adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) fell 72 percent to R897 million.
Sun International reported an adjusted headline loss of R1.1bn and an adjusted headline loss a share of 633 cents.
Chief executive Anthony Leeming said the group took key steps to manage the impact of the pandemic on the business to ensure that the group was in a strong position to deal with the lockdown and curbs on operations.
“We worked hard to reduce costs, optimise working capital, prioritise capital investment and negotiate with lenders, service providers and suppliers for either a waiver, reduction or deferment of payments. We formulated and implemented plans to achieve operational efficiencies and restructured certain parts of the business,” Lemming said.
In its South African operations, income fell 55 percent to R2.5bn, with adjusted Ebitda down 95 percent to R80m. The group incurred impairment charges of R1.3bn in its South African operations due to the lockdown curbs and anticipated a slow recovery. It also has operations in Latin America, Nigeria and Eswatini.
Looking ahead, Leeming said the Covid-19 pandemic would have a significant impact on the South African economy, which would take some time to recover from it.
“The capital raised as a result of the rights offer and the proceeds from the disposal of Sun Dreams has improved our liquidity position and significantly strengthened the group’s balance sheet. These actions and the various operational initiatives which we have undertaken and implemented in the last 12 months have ensured that the group remains well placed to be able to deal with the current and future Covid-19 challenges and has strongly positioned the group to recover and grow into the future,” Lemming said.
Sun International shares closed 0.07 percent higher at R15.24 yesterday.
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